An affiliate of Lone Star Real Estate Fund III has acquired Garvecat from Corporación Bética and Algarvetur, in other words the US company now owns Vilamoura.
This €200 million sale is part of a divestment process being carried out by Catalunya Banc as it tries again to concentrate on retail banking.
Lone Star’s plans involve the reinvigoration of the resort trough a long term investment plan. The investment plan will be executed by a team led by Paul Taylor as CEO of Garvecat, the company responsible for the development of the Vilamoura resort.
This price, although a bargain, still is the largest sale of land in the past seven years and the largest investment in a real estate business in the last eight.
Santander Totta acted as adviser and financing partner for Lone Star although it is not yet known on what basis the Portuguese managed bank is participating.
The amount that the Americans paid represents around a third of the resort's value five years ago before the economic crisis started, according to property experts.
In 2004, the Spanish bank paid resort development legend André Jordan around €360 million for the resort, leaving Lusort/Catalunya Bank now nursing a significant loss.
"The sale of Vilamoura may represent a turning point for the county and for the Algarve," said Loulé mayor, Victor Aleixo, who added that the transaction, "can mean a rebound in economic activity with an increased level of employmment. We current have very significant unemployment rates."
André Jordan commented that he was pleased with the sale, even at such a low price, also for the future of the resort under new owners, "From the contacts I have had with them, I know they are committed to investing and calling in other investors to develop and promote the project and the region."
For Jordan, "more important than the value of the sale, is the sale itself, and to an investor who wants to move forward with the project. Lusort was not doing anything."
Aleixo said that the plan for Vilamoura was approved 15 years ago and hopes now to see development going ahead.
The only part of Vilamoura that makes money is the marina, or so the Americans have been led to believe, but the €200 million paid for the resort, apart from being painfully low, is spare change for the American venture capital business which could simply sit on the investment and wait for better times ahead before reselling the resort to a developer.
Juan Pepa, Lone Star’s managing director for Spain and Portugal, said that “Vilamoura represents a unique opportunity for international investors looking to capitalise on the ongoing recovery of Portugal and its real estate sector”.
Vilamoura has huge building potential, about 700,000m2 available for new residential, commercial and tourism developments the prospect of which continues to send shockwaves through local eco-organisations.
See also: 'Vilamoura - Cidade Lacustre development - environmentalists fight back'
